Random thoughts on almost anything and everything, with an emphasis on defense, intelligence, politics and national security matters..providing insight for the non-cleared world since 2005.

Sunday, April 20, 2008

Accountability, Anyone?

Almost two years ago, we noted growing number the ethical and accountability issues facing the U.S. Air Force. Struggling to repair its reputation in the wake of the Boeing tanker lease debacle, the service was confronted by more allegations of wrong-doing, some involving high-ranking officials.

And sure enough, the Air Force awarded a $50 million contract to the company (Strategic Message Solutions) in December 2005--despite the fact that the firm's offer was more than twice as expensive as a competing bid. The service also ignored the precedent established by the Navy's Blue Angels, who received video screens for free, in exchange for selling advertising on their projection system during air shows. The SMS contract was later cancelled, after protests from rival firms.

Sitting at the head of the table, Air Force Maj. Gen. Stephen Goldfein, the highest-ranking officer in the room, leaned forward and told the officers and others assembled before him that they should steer a multimillion-dollar Air Force contract to a company named Strategic Message Solutions.

"I don't pick the winner, but if I did, I'd pick SMS," Goldfein said to the seven-person group that was selecting a contractor to jazz up the Air Force's Thunderbirds air show with giant video boards, according to a lengthy report by Defense Department's inspector general. The head of the selection team almost immediately "caved," giving in to what he believed was a fixed process, while another member of the team called it "the dirtiest thing" he had ever experienced

[snip]

In a probe that lasted more than two years, investigators concluded that Goldfein and others worked inside the Air Force contracting system to favor SMS and its owners, despite an offer by the company that was more than twice as expensive as a competing bid. Goldfein, who is now vice director of the Pentagon's Joint Staff, was found to have gone to great lengths to see the contract awarded to SMS, while senior Air Force leaders socialized with the company's partners. According to the report, Goldfein even arranged for President Bush to record a video testimonial in the White House Map Room that was included in the SMS contract proposal, demonstrating the company's credibility and access. The report offers a blow-by-blow account of how a small Air Force contract spun out of control, highlighting conflicts of interest in the selection process, officers stacking the deck in favor of friends, and others influencing a system designed to eliminate such favoritism in spending taxpayer dollars.

"The investigation found that the December 2005 award to SMS was tainted with improper influence, irregular procurement practices, and preferential treatment," according to a redacted copy of the report. "Lower priced offers from qualified vendors and capabilities in-house were bypassed in an apparent effort to obtain services from [redacted], president of SMS, who had a longstanding relationship with senior Air Force officers and members of the Thunderbirds."

According to the Post, Goldfein and four other unidentified officers have received administrative punishment. Reporter Erik Holmes of Air Force Times has also been on the story, and reveals that General Goldfein received a letter of reprimand. At the flag level, that probably enough to derail the general's career. However, at last report Goldfein was still in his job as Vice Director of the Pentagon's Joint Staff, and other Air Force generals have survived similar mistakes and continued to advance in rank.

Despite being removed from his post (normally a career-killer for senior officers) Shackleford's name subsequently appeared on the nomination list for major general, and he's now in line for his third star. Will the Air Force attempt a similar rehabilitation for Goldfein? Only time will tell.

What the Post and Air Force Times fail to note (at least in the referenced article) is that Goldfein continued his climb, despite ties to the Thunder-Vision controversy. At the time the contract was awarded, General Goldfein was Commander of the Air Warfare Center at Nellis AFB--home of the Thunderbirds. One of the partners in the company that won the contract was retired General Hal Hornburg, the former Commander of Air Combat Command (ACC).

As the head of ACC, Hornburg was in charge of CONUS-based fighter, bomber and combat training units, including the Air Warfare Center. Goldfein's assignment to Nellis (from October 2004-October 2006) was almost certainly cleared through Hornburg, who retired as the ACC Commander in January 2005, almost a year before the contract was awarded.

Despite concerns about the contract--and Goldfein's efforts to influence the selection process--he advanced to more important jobs in the military hierarchy. In November 2006, he moved to Langley AFB, Virginia, to a new assignment as Vice Commander of ACC. Barely four months later, General Goldfein was transferred to Washington, D.C., and his current position as Vice Director of the Joint Staff.

Those assignments raise serious questions for both the Air Force and the Defense Department. At the time of his reassignment to Langley, Goldfein was apparently under investigation for his role in the "Thunder Vision" contract, and the probe continued during his subsequent tour at the Pentagon. If he was under investigation--and there's nothing in the Post account or Air Force statements to indicate he wasn't--then why did General Goldfein keep moving up the ladder?

Certainly, the investigation was anything but a secret; media accounts of the probe date back more than two years. We can also assume that key Air Force leaders were aware of the investigation (and may have received periodic updates on its status) but did nothing to delay General Goldfein's advancement. The list of officers and officials in that category would likely include General Ron Keys, who succeeded Hornburg as ACC Commander; General Michael Moseley, the Air Force Chief of Staff and the Air Force Secretary, Michael Wynne.

To be fair, we should point out that general officers are occasionally the subject of frivolous complaints and investigations, often the result of complaints by disgruntled subordinates. A case in point is the allegation of infidelity, leveled at General Michael Hayden, during his tenure as head of the National Security Agency. Hayden was accused of having an affair with a female subordinate, during a visit to Kosovo several years ago. The charge was completely groundless, but it still had to be investigated, so an Air Force Colonel spent several months probing the matter.

But the allegations in this case are anything but frivolous. And, judging by the results of the investigation, it seems clear that senior Air Force officials tried to steer the "Thunder Vision" contract to a firm headed by a retired four-star general. General Goldfein left no doubt about his preference in the matter, while carefully noting that the final decision was not up to him.

Still, as Air Force Times reports, Goldfein lobbied actively on behalf of SMS:

The investigation report shows that a number of Goldfein’s actions appeared to steer the contract to SMS, and some members of the source-selection team told government investigators they did not think the process was fair.

For example, Goldfein told the contracting officer the winner of the competition should already be familiar with the Thunderbirds, so the officer elevated “strategic insight” to one of the top two criteria — up from its original status as a subcategory, according to the report.

The report says this tipped the scale in SMS’s favor. It is “reasonable to infer that Goldfein knew or should have known that his recommendation provided advantage to [Shipley],” the report states.

Three team members recalled Goldfein saying during a team meeting, “I’m not the [source-selection authority], but if I was the SSA, I’d select SMS,” according to the report.

Goldfein told investigators he does not recall saying that.

In a Nov. 8 meeting during which the final decision was made, the report says, Goldfein argued for team members to select SMS.

The Times also notes that General Goldfein even attempted--at one point--to become a part of the decision-making team. Told he could not serve in that capacity, Goldfein became an advisor to the selection panel, and according to the IG, tried to steer the contract toward SMS.

In addition to Goldfein, the company had other, high-ranking Air Force officials in its corner. As part of their investigation, IG representatives interviewed General Moseley, the Chief of Staff. Turns out that Moseley has a personal relationship with Ed Shipley, a wealthy infomercial producer--and vintage aircraft enthusiast--who was the other principal in SMS.

While the report contains no information that Moseley had contact with Goldfein or anyone else involved in the contract (after the video screen project was opened up for bids), it does include numerous e-mails and social gatherings during that time, involving General Moseley, Horburg and Shipley. As Air Force Times describes the contacts:

Some of those e-mails could be construed as discussing the Thunderbirds project. But Moseley said they addressed other issues.

For example, Moseley sent Hornburg an e-mail July 20: “I’ve engaged with a couple other guys around here to hopefully get a better response to the idea of public media outreach. We’ll see.”
Moseley said the e-mail does not refer to the Thunderbirds project.

On Aug. 10, Moseley e-mailed Shipley: “I’d like to run an idea or two by you to see how you react! I’m still wrestling with brand ideas and how to think through the options.”

Then on Sept. 22, Moseley sent Shipley another e-mail: “Dude ... I’ve talked to lawyers about your idea and I’ve talked to contracting bubbas about getting on with planned good ideas and I’ve got a way huge notion of building a better strategic communication effort. ... I want to chat with you about all this to see what you think.”

Investigators asked Moseley what he meant by this e-mail, and he said he was not referring to the Thunderbirds project.

An Air Force official familiar with the report told Air Force Times the e-mail refers not to the Thunderbirds project, but to Shipley’s idea to use paid advertising in Air Force strategic communications and outreach efforts to offset the costs to the service.

The report also contains an e-mail exchange in which Moseley asks Shipley to give a friend a ride in an aircraft at a Heritage Flight show.

[snip]

Moseley told Air Force Times that none of his contacts with Hornburg and Shipley was inappropriate, though he could have taken more steps to curtail his contact with them while the Thunderbirds project competition was ongoing.

“In perfect hindsight, then I would tell you ... yeah, I guess I could have been less receptive or less friendly,” he said.

In hindsight, you'd also think that Moseley could have offered similar advice to General Goldfein. But, if the Chief had his own ethical issues with "Thunder Vision," he wasn't in a position to caution Goldfein--or anyone else--about lobbying on behalf of SMS.

That's why this whole mess stinks to high heaven. And, there's more dirt in the details of the contract and its execution. A contracting officer who was interviewed by investigators revealed that SMS never provided the detailed financial documents required. There is also no evidence that the firm had the facilities to produce material that would be shown on the video screens.

And, just two days after it received the contract, SMS submitted a $2 million invoice for achieving "Milestone One," despite the fact that no services had been received, according to the IG.

Shipley told Goldfein the money was needed to ensure there would be no delays, the report says. Goldfein then called the contracting officer urging him to expedite payment, even though government contracting rules say payment due dates are 30 days after receipt of an invoice or 30 days after services are received, whichever is later.

Goldfein denied he had the payment expedited.P>

>Shipley also was allowed to use Air Force personnel and facilities to do the work, according to the report, both of which were prohibited by the contract.

We should note that no one will face criminal charges in connection with the contract. The U.S. Attorney's Office in Nevada declined to prosecute, due to a "lack of evidence of criminal wrong-doing," according to a statement. So, the only sanctions will be the LOR received by General Goldfein, and administrative punishments given to other, lower-ranking personnel involved in the scandal.

But there's also the matter of public trust and perception. When this scandal was first reported, we had a conversation with a senior Air Force civilian, an individual who's literally hard-wired into the service's upper echelons. At the time, he told us that the USAF was viewed as "lower than whale s--t" at the highest levels of the Pentagon, due to a (seemingly) endless parade of scandals and ethical lapses. Needless to say, the IG report won't exactly endear the Air Force to the current Secretary of Defense, Robert Gates.

Which brings us to the real bottom-line in this matter. The two-year investigation into the "Thunder Vision" controversy suggests an Air Force acquisition/contracting process that remains badly broken, and beset by favoritism and cronyism. Goldfein and Moseley are highly experienced officers and no strangers to service rules on ethical conduct.

Yet, Goldfein had no problem lobbying on behalf of SMS, and Moseley maintained social ties with the firm's CEO--while it was actively soliciting an multi-million dollar Air Force contract. Then, there's the matter of those e-mails. With all due respect to the chief of staff, his explanation about their content seems less-than-convincing. With Shipley (and Hornburg's firm) pushing hard for the video screen deal, it's hard to imagine that the topic never came up in communications with the service's senior officer. We'd say the e-mails were just carefully worded, in case the contract attracted controversy.

One of the fundamental rules in ethical behavior is one of the simplest: don't put yourself--or your organization--in a compromising position. But, Generals Goldfein and Moseley did just that, going to bat for a company that included a former colleague and commander among its partners. And they apparently saw nothing wrong with that.

Their conduct speaks volumes about an Air Force hierarchy that has grown increasingly cynical and corrupt in recent years. One of the service's great enlisted leaders (now retired) refers to them as the GOBAGS--the Good Ole Boys (and Girls) who dominate the upper ranks and form a mutal protective association. When one of them steps out of line (read: gets caught), a slap on the wrist is administered, and the system keeps lurching along.

That's why Mr. Gates needs to be proactive in addressing the service's integrity issue. The Air Force is long due for a thorough house-cleaning. We'd say that Mr. Gates could get everyone's attention by dismissing Moseley, Goldfein and Secretary Mike Wynne, who expressed "disappointment" over the chicanery revealed in the IG report.

Judging from the fallout in the Thunder Vision scandal (or the lack thereof), the Air Force has lost the ability to police its senior ranks. That's why Mr. Gates needs to step in and reset the service's ethical compass. The soul of the USAF is on the line. We can only hope that Mr. Gates, who began his public service career as an Air Force intelligence officer, will do the right thing--for the Air Force, and for the nation.

I can no longer sit back and allow communist infiltration,... communist indoctrination,... communist subversion,... and the international communist conspiracy... to sap and impurify our precious bodily fluids!